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Determinants of risk attitude and risk perception under changing climate among farmers in Punjab, Pakistan

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Abstract

Agriculture sector is uncertain and susceptible to climatic risks. Farmer’s risk attitude and risk perceptions play important roles in managing the risks at farm level. Precise and timely risk perception may help to evaluate the incidence and severity of risks while farmers’ attitude determines the response of the farmers toward risk. Therefore, farmers’ risk attitude and perceptions are significant in farmers’ decision-making during the uncertain conditions. The present study was designed to examine the farmers’ risk attitude and risk perceptions related to climatic factors. The study also focused on socioeconomic factors affecting the farmers’ risk attitude and risk perceptions. The study was conducted in three districts of Punjab such as Bahawalpur, Layyah and Rahim Yar Khan. Using a multistage sampling technique, a sample of 382 respondents was interviewed from all districts. The study employed the Equally Likely Certainty Equivalent and Cubic Utility Function to assess the risk attitude. Risk matrix was used to estimate the risk perceptions related to climate factors. The study used probit model to analyze the factors affecting the risk attitude and risk perceptions among farmers. Findings of the study indicate that most of the farmers have risk averse behavior. Farmers perceive rise in temperature as high risk followed by erratic rains, wind storms and pest breakouts. The results show that farmer’s age, education, farming experience and off-farm income significantly determine the farmers’ risk attitude and perceptions. The study results will be helpful for policy makers and researchers to design risk management strategies.

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Acknowledgements

The authors are grateful to farmers for facilitating the data and sharing their information about risk attitude and perceptions about climatic factors.

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Authors and Affiliations

  1. Department of Management Sciences, COMSATS University Islamabad, Vehari Campus, Multan Road, Vehari, Pakistan

    Muhammad Farhan, Muhammad Asim Yasin, Khuda Bakhsh, Rafaqet Ali, Sami Ullah & Saad Munir

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  1. Muhammad Farhan
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  2. Muhammad Asim Yasin
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  3. Khuda Bakhsh
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  4. Rafaqet Ali
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  5. Sami Ullah
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  6. Saad Munir
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Contributions

MAY and KB contributed to conceptualization, methodology, and writing—original draft preparation, RA and SU contributed to software and writing—reviewing and editing, MF and SM contributed to visualization and investigation.

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Correspondence to Muhammad Asim Yasin.

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Farhan, M., Yasin, M.A., Bakhsh, K. et al. Determinants of risk attitude and risk perception under changing climate among farmers in Punjab, Pakistan. Nat Hazards 114, 2163–2176 (2022). https://doi.org/10.1007/s11069-022-05465-x

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